Warnings and Winners From the IMF Meetings

Watch on YouTube ↗  |  April 21, 2026 at 20:39  |  9:41  |  Morgan Stanley
Speakers
Simon Waever — Head of Research, Paradigm

Summary

Simon Waever and Seth Carpenter discuss key investor takeaways from the IMF Spring Meetings, focusing on underpriced risks from the Iran conflict and central bank policy. They highlight the resilience of Emerging Markets, particularly Latin America, while noting vulnerabilities differ across regions based on energy exposure and policy space.

  • The growth hit from higher energy costs due to the Iran conflict may be underpriced by markets and policymakers.
  • Central banks face a greater risk of overtightening than being behind the curve on inflation.
  • Emerging Markets have built resilience and the year should be good for EM assets, assuming de-escalation.
  • Latin America is highlighted as a key winner due to distance from conflict, commodity exports, and US political realignment.
  • Within EM, energy exporters' sovereign bonds should outperform those of importers at $80 oil.
  • The US dollar could weaken if the market prices in more Fed cuts.
  • Differentiation within EM energy importers is significant, based on fiscal buffers and policy space.
  • The overall outlook is contingent on the trajectory of the Middle East conflict.
Trade Ideas
Simon Waever Head of Research, Paradigm 4:25
EM assets should perform well this year.
EM has built resilience through credible policy responses to recent shocks, and the year as a whole should be good for EM assets assuming a trajectory of de-escalation in the Middle East conflict, with external imbalances contained and mechanisms to deal with energy price shocks.
EEM HIGH
Simon Waever Head of Research, Paradigm 5:40
US dollar may weaken on Fed cuts.
The US dollar may weaken quickly if the market prices in more Fed cuts, particularly in a scenario of de-escalation in the Middle East conflict, leading to a return to trading dollar weakness.
USD MED
Simon Waever Head of Research, Paradigm 6:17
Latin America is a key winner.
Latin America is a key winner, reinforced by the Iran conflict, because the region is physically removed from the Middle East, has many large commodity exporters, and benefits from political realignment with the US. Specific positive catalysts include Argentina's structural reforms and FX purchases, and Venezuela's re-engagement with the IMF.
ILF HIGH
Simon Waever Head of Research, Paradigm 8:10
EM energy exporters outperform importers.
Within Emerging Markets, energy exporters should outperform energy importers in an $80 oil price environment, which is a sweet spot for EM sovereign dollar bonds. Differentiation will pick up, and policy space varies significantly among importers.
EMB MED
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This Morgan Stanley video, published April 21, 2026, features Simon Waever discussing EEM, USD, ILF, EMB. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Simon Waever  · Tickers: EEM, USD, ILF, EMB